On Friday, Deep Phosphates made a decent market debut with its shares listed at Rs 43.55 on the BSE, a 4 per cent premium over its issue price of Rs 42 per share. The stock of the fertiliser company went up by 13 per cent to 47.25 after listing. The stock opened at 44 on the National Stock Exchange NSE.
At 10: 07 am, Paradeep Phosphates was trading at Rs 45.85, up 5 per cent from its opening level on the BSE. A total of 56 million equity shares have been traded on the BSE and NSE.
The initial public offering IPO of Paradeep Phosphates had managed to scrape through despite challenging market conditions.
The net proceeds of the new issue are proposed to be used to finance the acquisition of the Goa facility, prepayment of certain borrowings and general corporate purposes.
Phosphates is part of the Zuari group and is involved in manufacturing, trading, distribution, and sales of a variety of complex fertilizers such as DAP, three grades of Nitrogen-Phosphorus Potassium namely NPK - 10, NPK - 12, and NP - 20 Zypmite, Phosphogypsum and Hydroflorosilicic acid.
The company is the second largest private sector manufacturer of non-urea fertilizers and Diammonium Phosphate DAP in terms of volume sales for the nine months ended December 31, 2021. The fertilizers are marketed under the brand names Jai Kisaan-Navratna and Navratna.
The stock will trade at post issue P E multiples of 15.3 times FY 21 EPS at the upper end of the issue price band, which is similar to other players like Chambal fertilizer and Deepak fertilizers, though they may not be strictly comparable, said Angel One in an IPO note.
After the completion of the Goa transaction, the company will acquire the business of developing, manufacturing and trading urea and NPK products at the Goa facility.
In a note from HDFC Securities, the total fertilizer production capacity of DAP and NPK production plants is expected to increase by approximately 0.80 MT, and the annual capacity of producing Urea to be approximately 0.04 MT after the acquisition of the Goa facility.
The brokerage said that the company is in the process of increasing the production capacity of certain facilities, developing new plants and modernizing certain equipment.